Iridium Communications Inc (IRDM)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 169.16 | 229.08 | 116.05 | 103.86 | 129.49 |
| Days of sales outstanding (DSO) | days | 43.41 | 42.34 | 41.65 | 37.66 | 38.26 |
| Number of days of payables | days | 41.03 | 72.07 | 62.35 | 57.91 | 57.37 |
| Cash conversion cycle | days | 171.55 | 199.35 | 95.34 | 83.61 | 110.38 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 169.16 + 43.41 – 41.03
= 171.55
Iridium Communications Inc's cash conversion cycle, which measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, has been fluctuating over the years based on the provided data.
As of December 31, 2020, the cash conversion cycle stood at 110.38 days, indicating that the company took approximately 110 days to convert its investments in inventory into cash from sales.
By the end of 2021, the cash conversion cycle improved to 83.61 days, reflecting a more efficient management of working capital which resulted in a shorter time period for cash conversion.
However, in the following years, the cash conversion cycle increased again to 95.34 days by December 31, 2022, and significantly rose to 199.35 days by December 31, 2023. This sharp increase may suggest potential issues in managing inventory, collecting receivables, or paying suppliers efficiently, leading to a longer cash conversion cycle.
By the end of 2024, the cash conversion cycle reduced slightly to 171.55 days, but still remained at a relatively high level compared to the earlier years. This indicates that Iridium Communications Inc may need to focus on enhancing its working capital management practices to improve cash flow efficiency and overall financial performance.
Peer comparison
Dec 31, 2024